XIAOMI Corp. unveiled plans Tuesday to invest US$10 billion in a new smart electric vehicle (EV) business, and separately to release a self-developed computing chip, as the group expanded out of its core smartphone business.

At a livestreamed event held Tuesday, Xiaomi CEO Lei Jun, who will also head the smart EV unit, said the division will be the “last major entrepreneurial project” in his life.

The firm will initially invest 10 billion yuan (US$1.52 billion) in the unit, with a total investment goal of US$10 billion over the next 10 years, Xiaomi said in a filing published earlier on the Hong Kong stock exchange.

The firm will contribute about 60 percent of the envisioned sum and plans to raise the rest of the funds, said a source familiar with the matter.

“We have a deep pocket for this project,” Lei said. “I’m fully aware of the risks of the carmaking industry. I’m also aware the project will take at least three to five years with tens of billions of investment.”

Xiaomi doesn’t plan to invite outside investors to the project as the company wants full control of the carmaking business, he added. “This will be the last startup project in my career.”

Xiaomi becomes the latest to pile into an already crowded EV arena, where an array of automakers from Tesla Inc. to local upstarts Nio Inc. and Xpeng Inc. are battling for a slice of the world’s biggest EV market.

Search giant Baidu Inc. and Geely Automobile Holdings Ltd. are also said to be teaming up to build electric cars. EV sales in China may climb more than 50 percent this year alone as consumers embrace cleaner automobiles and costs tumble, research firm Canalys estimates.

Xiaomi will outsource car assembly to contract manufacturers, a model it uses for its smartphones, according to the source. Xiaomi relies on contract manufacturers such as Foxconn Technology Group to make its mobile devices.

However, the company has no plans to choose “established” automakers for its manufacturing partners, the source said. Great Wall Motor Co. last week rejected a Reuters report it will help Xiaomi make EVs.

Lei led a review of the EV industry’s potential several months ago and a final decision to enter the arena was made in recent weeks, said another person familiar with the matter. Xiaomi has already hired engineers to work on software to be embedded in its cars, the person added.

Founded by Lei more than a decade ago, Xiaomi became the fastest-growing smartphone maker in China in the fourth quarter of last year after Huawei found it difficult to source key chips because of U.S. sanctions. Beyond mobile devices, it’s best known for running Internet services and making a range of cut-price home gadgets from rice cookers to robo-vacuums.

During the press event, Xiaomi also announced the release of a self-developed computing chip. Known as the Surge C1, the chip is an image signal processor (ISP), used to enhance a phone’s ability to process high-resolution images and video.

Xiaomi said that the company took two years and spent 140 million yuan in research and development costs to develop the chip, which will be placed in the company’s newly announced Mi Mix folding phone.

The company has long been attempting to crack the semiconductor sector, though to date it has had limited success compared with Huawei.

(SD-Agencies)